A figure, used for taxes, that shows if you make a profit when you sell your house

You can calculate the adjusted cost basis by adding the amount you paid for the house to how much you spent on capital improvements and subtracting any losses or depreciation. Capital improvements are any major renovation that increases a home's value, like enlarging a kitchen, installing a pool, or adding an extra bedroom.

Example: How do you calculate your adjusted cost basis?

		Purchase price		$200,000
		Kitchen expansion	+	10,000
		Flood damage repair	-	6,000
		Adjusted cost basis	=	$204,000

See: Capital gain